Retail insolvencies ease in June, but fashion sector remains on edge
For fashion retailers, the decline provides momentary breathing space, but analysts warn it is unlikely to mark a turning point.
'Retailers enjoyed a positive month of trading in June, helped by the hot weather and the start of major sporting events and festivals, leading to fewer insolvencies than in prior periods,' noted Gordon Thomson, restructuring partner at RSM UK. 'But how much longer will this good run last?' The sector remains acutely exposed
A number of high street names have already sought formal restructuring processes in recent months, reflecting both the squeeze of rising costs and the difficulty of keeping pace with shifting consumer expectations. For some retailers, the failure to invest in business transformation, whether through supply chain resilience, digital channels, or adaptive store formats, has left balance sheets dangerously vulnerable.
Fashion, in particular, has felt the strain. Employment, Thomson observed, remains the single largest cost line for retailers, and job losses have become more pronounced. Hiring freezes may preserve short-term margins, but they come at the expense of customer service, a critical differentiator in apparel and luxury, where experience often drives spend as much as product.
The macroeconomic backdrop compounds the unease. The Chancellor's autumn budget looms over the industry, with what Thomson described as 'a significant fiscal black hole to fill.' Retailers are bracing for measures that could further tighten consumer sentiment at a time when households remain wary of discretionary outlays. The hoped-for 'consumer-led recovery' has yet to materialise, despite relatively buoyant June sales.
Margins in fashion retail have always been narrow, but the combination of high labour costs, global supply chain fragility, and cautious consumer demand is stretching operators to breaking point. As the Golden Quarter, the critical period running from October through December, approaches, the industry faces a stark divide: agile businesses with strong product vision and market positioning may weather the storm, while weaker operators risk accelerated decline.
The dip in insolvency figures should be seen less as a recovery and more as a pause in what remains a highly volatile market. For those working in fashion, the lesson is clear: staying nimble, investing in new ideas, and running a tighter operation are now essential, not optional. With the all-important Golden Quarter approaching, the industry is walking a fine line, and without targeted government support in the upcoming budget, even well-run businesses could find themselves under pressure at the very moment they rely on sales the most.
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Fashion United
16 hours ago
- Fashion United
Retail insolvencies ease in June, but fashion sector remains on edge
The latest UK insolvency statistics offer a brief respite for retailers, though underlying pressures suggest the industry is far from out of danger. Company insolvencies in the retail trade fell to 169 in June 2025, a 12 per cent drop from May's 192 cases and 17 per cent lower than the 203 recorded in June 2024, according to official data. For fashion retailers, the decline provides momentary breathing space, but analysts warn it is unlikely to mark a turning point. 'Retailers enjoyed a positive month of trading in June, helped by the hot weather and the start of major sporting events and festivals, leading to fewer insolvencies than in prior periods,' noted Gordon Thomson, restructuring partner at RSM UK. 'But how much longer will this good run last?' The sector remains acutely exposed A number of high street names have already sought formal restructuring processes in recent months, reflecting both the squeeze of rising costs and the difficulty of keeping pace with shifting consumer expectations. For some retailers, the failure to invest in business transformation, whether through supply chain resilience, digital channels, or adaptive store formats, has left balance sheets dangerously vulnerable. Fashion, in particular, has felt the strain. Employment, Thomson observed, remains the single largest cost line for retailers, and job losses have become more pronounced. Hiring freezes may preserve short-term margins, but they come at the expense of customer service, a critical differentiator in apparel and luxury, where experience often drives spend as much as product. The macroeconomic backdrop compounds the unease. The Chancellor's autumn budget looms over the industry, with what Thomson described as 'a significant fiscal black hole to fill.' Retailers are bracing for measures that could further tighten consumer sentiment at a time when households remain wary of discretionary outlays. The hoped-for 'consumer-led recovery' has yet to materialise, despite relatively buoyant June sales. Margins in fashion retail have always been narrow, but the combination of high labour costs, global supply chain fragility, and cautious consumer demand is stretching operators to breaking point. As the Golden Quarter, the critical period running from October through December, approaches, the industry faces a stark divide: agile businesses with strong product vision and market positioning may weather the storm, while weaker operators risk accelerated decline. The dip in insolvency figures should be seen less as a recovery and more as a pause in what remains a highly volatile market. For those working in fashion, the lesson is clear: staying nimble, investing in new ideas, and running a tighter operation are now essential, not optional. With the all-important Golden Quarter approaching, the industry is walking a fine line, and without targeted government support in the upcoming budget, even well-run businesses could find themselves under pressure at the very moment they rely on sales the most.
Auto Car
3 days ago
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A Corvette designed in England? Inside GM's new Leamington Spa base
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Still, the question hangs: why does GM need a design operation in Europe? After all, in the medium term, it will sell only electric Cadillacs, Corvette sports cars and some top-end commercial vehicles here, and these will very much be American cars. There used to be an impressive GM design studio at Luton, back in the heyday of Vauxhall, and an even bigger one at Rüsselsheim in Germany when Opel became the senior brand, but those were swept away when the PSA Group bought Opel-Vauxhall eight years ago. Thomson has no doubts about his usefulness. If you run a multi-branded car company such as GM, he contends, more than anything else you need good ideas. And plenty of them. 'It's no longer good enough to design cars for one territory or another,' he says. 'Your designs must be understood everywhere. You need diversity among designers too – different backgrounds and ages. If you had a studio in just one area, you would get a very strong viewpoint reflecting specific trends, aspirations, lifestyles. GM knows this, and it knows it needs to gather influences from Europe. That's why we're here.' Other foreign locations leave no doubt that GM's global intentions are as strong as ever: there are two studios in the US (Detroit and California), plus one in South Korea and another in China. The establishment in Ashbourne Drive seems to have been driven by when Thomson became available and the empathetic relationship he has developed with Michael Simcoe, GM's vice-president of design. Thomson is very experienced: he trained at the Royal College of Art in London, where he was sponsored by Ford, then joined Lotus, where he took the top job after Peter Stevens left, and famously designed the original Elise. 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One of the challenges for Europe is dealing with the issue of Americanness, says Thomson: 'When we did the Corvette, some people thought we would just do a European car with a Corvette badge on it. "But that would have completely missed the point. Corvette has a tremendous history; it's the world's most successful sports car. We had to respect that – but hopefully give it some freshness and some features that would make people think.' The key to this new challenge of doing American cars in Europe, believes Thomson, is to recognise the things Europeans value in American design: 'Everyone watches American films and TV and buys American clothes. Ideas of optimism, of confidence, of entertainment are seen a lot of American design. "You see it in engineering projects like Nasa's Apollo programmes. Our job is to present this from a new viewpoint and not to be stuck in a groove.' 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Reuters
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